As the title says this year, I will make a couple thousand dollars on a 1099 side hustle. It will be less than 3% of my income, the rest is w2. Since I will be withholding more than 90% of my taxes through my W-2 job, do I need to pay quarterly taxes on this 1099?
Or can I just wait until I file next year??
I am going to make a couple thousand dollars this year on a 1099. Do I need to pay estimated quarterly taxes?
byu/Worth-Jicama3936 intax
Posted by Worth-Jicama3936
8 Comments
Until you hit a much higher cap (80k per year), you have much more running through your company (took 180k to make 30k) or you have a ton of write offs(equipment was 200k), you’re good to do yearly.
Look up your local caps for LLC and S-Corp.
If you will have 90% withheld at your other job, then you will meet the minimum safe harbor requirements and can wait.
Make sure you factor in self employment tax when determining your expected liability.
No if you owe less than 1k or paid in 90% of your total you won’t get penalties.
Note instead of filing quarterly if you needed to, you could also just tell your job to with hold extra.
Not that filing quarterly is hard, but in the past I just opted to withhold more from my w-2 job.
Don’t forget to deduct your expenses from your revenue you only owe tax on the net profit.
Also remember, in addition to the federal income tax you will owe15.3% payroll tax
In the 22% tax bracket, federal tax on $2000 net self employment income is about $750. Since that is less than $1000, you don’t need to make estimated tax payments, assuming your withholding is correct.
Withholding on $70,000 should be about $7200, so your withholding will be barely over 90% of your tax.
So you are right on the cusp. If your self employment income turns out to be $3000 instead of $2000, you will want to increase your withholding a bit before the end of the year.
Absolutely yes
Not necessarily.
Do you typically get some tax refund? What’s your tax rate? Would that cover the difference?
If you think you’ll owe , it doesn’t hurt to send the IRS some dollars. But there’ll be no penalty as long as you’ve paid at least 90% and less than $1000 owed.
Also consider putting it in your 401k if you don’t max already, or if you don’t have a plan at your main job, you can create a Solo 401k.